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The poverty of China's rural areas is a problem that arose over long
years in the past. Impoverished regions in China are characterized mainly
by a large area and population sunk in poverty. Based on its understanding
of the basic national conditions, especially the reality of the poverty-stricken
areas and people, the Chinese Government has formulated a policy for development-oriented
poverty alleviation that conforms to the reality in China. It sets mainly
solving the problem of food and clothing of the rural poor as its basic
objective and central task in this regard, starting from the most urgent
problems, acting according to its capability, giving priority to key areas,
and advancing step by step.
Defining the Standard of Poverty in Conformity with the National Conditions
China is a developing country with a large population, a meager heritage
and an underdeveloped economy, especially in the rural areas. In terms
of the poverty-stricken areas in China, the underdevelopment is mainly
reflected in the following: First, weak infrastructure. In the western
region, where most of these areas are located, although the territory
is over two-thirds of the nation's total, the proportions of railways,
highways and civil aviation facilities are relatively low. Second, a rapidly
growing population, and the low level of education, public health and
other basic social services. In contrast to the backward economy, the
poverty-stricken areas are usually noted for their rapidly growing populations.
Due to the poor conditions for running schools and backward education
facilities, a great number of school-age children are unable to go to
school or obliged to discontinue their studies, and the illiteracy rate
of the young and middle-aged is high. These areas are also characterized
by a very low level of health care work. Third, poor agricultural production
conditions, low revenue, and seriously inadequate public input. In 1986,
the per-capita motive power of agricultural machinery in the counties
on the state's priority poverty relief list accounted for only 50 percent
of the national average. In 1993, the per-capita revenue in these counties
was 60 yuan, only about 30 percent of the national average.
In accordance with the above-mentioned actual conditions, it is necessary
to fix a realistic standard of poverty for China's help-the-poor work.
The earliest standard was calculated by the relevant government departments
in 1986, on the basis of the investigations of the consumption expenditures
of 67,000 rural households, i.e., the standard of 206 yuan in per-capita
net income in rural areas in 1985. It was equivalent to 300 yuan in 1990
and 625 yuan in 2000.
China's standard of poverty is the standard of the lowest expense to maintain
one's basic subsistence. It can guarantee the basic living needs of the
rural poor in China and, therefore, is an objective standard and also
one that conforms to the reality in China.
Defining the Key Poverty-stricken Counties to Be Aided by the State
To use poverty relief funds in a unified way, and effectively aid the
poor and needy, the Chinese Government has formulated the standard of
the key poverty-stricken counties to be aided by the state, and identified
a number of such counties.
The Chinese Government defined the standard of the key poverty-stricken
counties to be aided for the first time in 1986: the counties with a net
yearly income of less than 150 yuan per peasant in 1985. Subsequently,
the standard had been readjusted in keeping with the economic development,
especially the constant improvement of the economic conditions of the
poverty-stricken areas. The readjusted standard in 1994 was less than
400 yuan in per-capita net income in 1992. So all those counties originally
on the priority list where the per-capita net income had exceeded 700
yuan in 1992 were taken off the list. (According to a typical calculation
at the time, the problem of food and clothing of over 90 percent of the
poverty-stricken people in the counties with the per-capita net income
of more than 700 yuan had been basically solved.) According to this standard,
592 counties in 27 provinces, autonomous regions, and municipalities directly
under the Central Government were listed as the key poverty-stricken counties
to be aided in the Seven-Year Priority Poverty Alleviation Program, covering
over 72 percent of the rural poor across the country. The series of policies
and measures for development-oriented poverty relief work adopted by the
Central Government in subsequent years were mainly centered on solving
the problem of food and clothing of the people in the counties on the
state priority list.
The state has driven forward the solution of poverty in the rural poverty-stricken
areas across the country through concentrated and effective aid to the
impoverished counties. The state has explicitly demanded that all aid-the-poor
funds must be used in the poverty-stricken counties. In 1996, the Central
Government further set the minimum proportion of supportive poverty relief
funds (30-50 percent) for the provinces, autonomous regions and municipalities
to guarantee the local supportive funds to be used in the key counties.
Putting the Stress on the Poverty-stricken Areas in the Central and
Western Regions
It is an important strategic measure to favor the central and western
regions in China's development-oriented assistance to the poverty-stricken.
The regional features of China's economic development are very outstanding.
The eastern coastal areas take the lead in economic development, taking
full advantage of their own strengths. But the central and western regions
are relatively backward. Therefore, China's rural poor are mostly concentrated
in the central and western regions, especially in the western region,
living in scattered areas in deserts, hills, mountains and plateaus. These
regions are characterized by the largest number of poor people, and the
deepest degree and most complicated structure of poverty. Of the 592 poverty-stricken
counties named by the Chinese Government on its priority poverty relief
list in 1994, 82 percent are situated in the central and western regions.
The Chinese Government started to readjust the regional structure of the
allocation of the state poverty relief funds in 1994: adjusting the relief
credit funds of the Central Government in the coastal economically developed
provinces to favor the worst provinces and autonomous regions in the central
and western regions, and earmarking the new relief funds from the central
budget only for poor areas in those provinces and regions. Keeping the
overall situation in mind, the state has formulated preferential policies
to actively promote a horizontal union between the eastern and western
regions, and the aid-the-poor cooperation between similar departments
of different institutions.
Over the past year, China has started to carry out the strategy of large-scale
development of the western region to accelerate its development and narrow
the gap in development between regions. The state has arranged preferential
construction projects of infrastructural facilities, ecological environment
and resource development in the western region, steadily increasing its
investments and its financial transfer payments to the western region.
All these have contributed a great deal to promoting the development of
the western region and the solution of the food and clothing problem of
the poverty-stricken there.
Increasing Capital Input for Poverty Reduction
Over the past 20 years, with the augmentation of the state financial resources,
the special aid-the-poor funds arranged by the Chinese Government have
constantly increased. In 2000, such funds totaled 24.8 billion yuan, or
31 times as much as in 1980. The accumulative total of such funds have
reached over 168 billion yuan, of which more than 80 billion yuan was
from financial funds (including over 39 billion yuan of work-relief funds),
and 88 billion yuan from credit funds. Local governments have also increased
the aid-the-poor funds according to the proportion of supportive funds
set by the Central Government (30-50 percent since 1996).
The special aid-the-poor funds of the Chinese Government mainly include
two categories: financial and credit funds. The former includes funds
to support the development of the underdeveloped areas, the new financial
aid-the-poor funds, and work-relief funds. To tighten the control of the
aid-the-poor funds and improve their utilization benefits, the State Council
formulated the unified Measures on the Management of the State Poverty
Relief Funds in 1997, explicitly providing for the objects and conditions
of the aid, with special emphasis on the requirement that these funds
should be used complementarily according to the overall objectives and
requirements of the Seven-Year Priority Poverty Alleviation Program, so
as to form a concerted effort enabling the funds to generate overall benefits.
The aid-the-poor funds from various channels should be mainly put into
the following fields: The financial funds are to be mainly used in the
construction of basic farmland, small irrigation works and country roads,
providing drinking water for people and livestock, technical training
and the popularization of practical agrotechniques; the credit funds are
to be used in assisting the poverty-stricken households in crop cultivation
and aquiculture and poultry raising projects to increase their incomes
of the same year. At the same time, the special relief departments at
all levels are required to strengthen the inspection and supervision of
the management and use of the funds. Auditing departments are required
to strictly audit the use of the funds and promptly deal with and problem
once found. These measures have played a key role in improving the utilization
benefits of the aid-the-poor funds and in realizing the objective of basically
solving the problem of food and clothing of the poor according to the
required schedule.
Formulating Preferential Policies to Support the Development of the
Poverty-stricken Areas and Peasant Households
China's preferential policies for the development-oriented assistance
to the poverty-stricken cover two aspects-helping the poor households
to solve the problem of food and clothing, and supporting the economic
development of the poor areas.
The preferential policies for helping the development of the poverty-stricken
peasant households include: Waiving the mandatory state grain procurement
quotas of households whose problem of food and clothing has not been solved;
appropriately prolonging the utilization time limit of aid-the-poor loans
and softening the terms of mortgage and guarantee, according to the actual
situation; and reducing or remitting agricultural taxes and taxes on special
farm produce according to the relevant provisions of the regulations on
agricultural taxation.
The preferential policies to support the economic development of the poverty-stricken
areas include: Gradually strengthening the financial transfer payments
to poverty-stricken areas by the Central Government, and establishing
a secondary transfer payment system by the relevant provinces, autonomous
regions and municipalities to offer financial support to those areas;
remitting income tax for three years for new enterprises in the poverty-stricken
counties and enterprises established there by people from the developed
areas; and, according to the principle of "he who benefits bears
the expense," duly raising the standards of the construction and
maintenance funds in the reservoir regions and earmarking these funds
specially for solving the problem of food and clothing of the reservoir
regions' relocated people.
Carrying Out the Responsibility System for Poverty Relief Work
To effectively implement the development-oriented aid-the-poor work, the
Chinese Government established a Leading Group of the State Council for
the Economic Development of Poverty-stricken Areas in June 1986 (renamed
Leading Group of the State Council for Development-oriented Poverty Relief
in 1993), to be responsible for the organization, direction, coordination,
supervision and examination of the work in this regard. The governments
of some provinces, autonomous regions, municipalities, prefectures (cities)
and counties have also established corresponding organizations in charge
of the local poverty reduction drive.
China practices the level-by-level responsibility system, with the provincial
authority as the main player, in its administrative leadership of the
poverty reduction work. The provinces, autonomous regions and municipalities,
especially provinces and autonomous regions with large numbers of poverty-stricken
areas, have put development-oriented poverty relief high on their agendas,
and formulated concrete local implementation plans in line with the state's
poverty relief program. The principal leaders of the provinces, autonomous
regions and municipalities are required to personally supervise the work
and assume overall responsibility. The Central Government issues the relief
funds in one lump sum to the provinces, autonomous regions and municipalities
at the beginning of every year, and accords the "four assignations"
(of funds, powers, tasks and responsibilities) to the provinces, (autonomous
regions and municipalities). All the funds assigned to the provinces are
to be arranged and used by the people's government at the provincial level,
which shall organize the relevant departments to plan and implement the
development projects.
Strengthening the Building of the Primary Organizations
The rural primary organizations in China have an important role to play
in mobilizing and organizing the people to participate in the development-oriented
poverty reduction work aimed at reshaping their own destiny. The Chinese
Government has stressed improving the rural organizations at the village
level in its poverty reduction drive, in order to enhance the degree of
self-organization of the peasant households and guide them to bear an
active part in the drive. In the past year, the Chinese Government has
vigorously carried out the direct election system of villagers' committees
in rural areas, so that people who are really supported by the masses
and are able to lead them to shake off poverty can be elected as village
cadres according to the principle of openness, fairness and justice. At
the same time, a policy has been strictly carried out, whereby village
affairs, such as revenue and expenditure, the distribution and use of
the poverty relief funds, and the conclusion and alteration of contracts
are left open to the villagers for their examination and supervision.
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